Businesses are not convinced that the framework used by HM Revenue and Customs (HMRC) to settle tax disputes is flexible enough to allow for the most effective settlement, according to new research.

However, the majority of large business tax directors surveyed by the Business Tax Centre at Oxford University believed that changes made to HMRC's litigation and settlement strategy (LSS) in 2011 has greatly improved its fairness, the reports' authors Judith Freedman and John Vella told attendees at a recent conference organised by the university. The full report will be published next month.

Responding to the results of the survey in a separate presentation at the conference, tax expert Jason Collinsof Pinsent Masons, the law firm behind Out-Law.com, said that the implication from some of the responses was that HMRC would sometimes work hard to fit settlements within the constraints of the LSS.

"Both sides don't want to litigate finely balanced issues, but a literal approach to the LSS forces that outcome," said Collins, who added that there was some evidence of public pressure preventing HMRC from backing down in case a settlement might wrongly be perceived as a "deal".

Reports from the conference emerged alongside an announcement from HMRC that as a result of increased compliance activity it had secured a record £23.9 billion in tax revenue over the past year that would not otherwise have been collected. Tax collected as a result of HMRC's investigations last year was nearly £1bn above the target set by 2013's Autumn Statement and £3.2bn higher than the amount that it collected the previous year, according to the figures.

The LSS sets out the way in which HMRC handles all tax disputes, subject to civil law procedures. It commits HMRC to resolve disputes in a way that is consistent with its view of the law while considering the most cost-effective solution to disputes, and states that HMRC must settle for the full amount it believes that a tax tribunal or court would determine unless its case is "weak or non-worthwhile". It does not permit "splitting the difference" if the only possible outcome to a dispute is either that a taxpayer owes nothing or that it owes the full amount.

The majority of large business tax directors surveyed by the Business Tax Centre were of the view that HMRC was no longer taking forward disputes that could not be justified in terms of the revenue at stake since the introduction of the LSS, according to Freedman and Vella's presentation. Firms were also now adopting more collaborative working practices with HMRC, and were familiar with the law and facts underlying a dispute, they said.

There was also some evidence of creative interpretation of the LSS in order to fit settlements within the letter of the rules, according to the researchers. They gave examples of breaking down an issue into smaller issues which could then be settled on an 'all or nothing' basis, or of taking an 'alternative' view of the facts in order to reach a solution within the confines of the LSS.

"It is clear that customer relationship managers (CRMs) often understand the issues, and want to reach a solution, but can feel constrained by the LSS: an experienced CRM, in negotiations with an experienced tax director or adviser, will often find a way to a mutually acceptable answer, but this does not suggest that the LSS objective of consistency is being achieved," Jason Collins said.

In his presentation, Collins said that new anti-avoidance measures such as the general anti-abuse rule (GAAR) and accelerated payment and follower notices would likely have a "dramatic" effect on avoidance behaviour and so may take some of the pressure off the LSS.

According to the latest figures from HMRC, recent compliance activity has resulted in a number of tribunal wins and also closed 'loopholes' involving corporation tax and stamp duty land tax. Of its record £23.9bn in additional revenue, more than £8bn had been secured from large businesses and £2.7bn from tackling avoidance schemes in the courts, HMRC said.

"The government supports the hardworking, honest majority of taxpayers that play by the rules, and is determined to tackle the minority that seek to avoid paying the taxes they owe," said David Gauke, Exchequer Secretary to the Treasury.

"We set HMRC ambitious targets to increase its yield and the figures published today demonstrate that HMRC is successfully meeting these challenges. It also sends a clear signal - HMRC will pursue those seeking to avoid their responsibilities and will collect the taxes that are due," he said.